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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI H.S. SIDHU
ORDER This appeal filed by the assessee against the impugned order passed by the Ld. CIT(Appeals)-20, New Delhi in relation to assessment year 2015-16 on the following grounds:
1. “That the order of Ld. Commissioner of Income Tax (Appeals) is bad in law as well as on the facts and in the circumstances of the case.
2. That the Ld. CIT(Appeals) has erred in sustaining the action of the Assessing Officer in denying the deduction u/s 80P of the Income Tax Act, 1961 in respect of interest earned on bank FDRs and on saving account held with bank.
3. That the Ld. CIT(Appeals) has erred in sustaining the action of Assessing Officer in treating the interest earned on bank FDRs and on saving account held with bank to be ‘Income from other sources’ while the same is attributable to the normal business activities of providing credit facilities.
4. That the Ld. CIT(Appeals) has erred in sustaining the addition of Rs. 2,60,727/- made by the Assessing Officer on the basis of judgment of Hon’ble Delhi High Court in the case of Mantola Cooperative Thrift & Credit Society Ltd. which is distinguishable on the facts of the case of the appellant. 5. That the Ld. CIT(Appeals) has erred in not considering the CBDT Circular No. 18/2015 dated 2nd November, 2015 which was applicable to the facts of the case of the appellant. 6. The above grounds of appeal
are without prejudice to each other.
7. The appellant craves leave to add, alter, amend and/or modify the above grounds of appeal.”
2. Facts narrated by the Revenue authorities are not disputed by the both parties, therefore, no need to repeat the same for the sake of convenience.
3. At the time of hearing, Ld. Counsel for the assessee stated that issue in dispute has already been decided by the ITAT Delhi Benches ‘D’ Bench, New Delhi in the case of ACIT, Circle 38(1), New Delhi vs. M/s Jawala Cooperative Urban Thrift & Credit Society Ltd. in AY 2008-09 dated 19.12.2014. He has also filed a copy of the said order and requested that respectfully following the aforesaid order the addition in dispute may be deleted and appeal filed by the assessee may be allowed.
Ld. Sr. DR strongly opposed the request of the assessee and stated that the Ld. First Appellate Authority has decided the issue in dispute against the assessee by respectfully following the order of the Hon’ble Delhi High Court in the case of M/s Mantola Cooperative Thrift & Credit Society Ltd. She further stated that the case law relied upon by the Ld. AR order passed by the ITAT Delhi Benches ‘D’ Bench, New Delhi and not by the Hon’ble High Court or Supreme Court. Therefore, the case law relied upon by Ld. Counsel for the assessee may not be followed and the appeal filed by the assessee may be dismissed.
I have heard the both parties and perused the relevant record available with me especially the order passed by the Hon’ble Delhi High Court mentioned in the impugned order and the order filed by the Ld. Counsel for the assessee i.e. of ITAT Delhi Benches ‘D’ Bench, New Delhi passed in AY 2008-09 in the case of ACIT, Circle 38(1), New Delhi vs. M/s Jawala Cooperative Urban Thrift & Credit Society Ltd. dated 19.12.2014 in which the undersigned is the party. For the sake of convenience the finding of the ITAT Delhi Benches ‘D’ Bench New Delhi para 9 to 11 are reproduced as under: “9. We have heard rival parties and have gone through the material placed on record. We find that total income earned by the assessee included income on fixed deposits placed with Bombay Mercantile Bank, interest income from a scheduled bank and dividend income from Delhi Cooperative Bank. From the certificate as placed at paper book page 30, we find that Bombay Mercantile Cooperative Bank is a cooperative society registered under Maharashtra Cooperative Societies Act and we further find that the said society has been assessed u/s 143(3) as a cooperative society and its income was allowed to be exempt u/s 80P(2)(i) as held by Mumbai Tribunal in and 4129 vide its order dated 30.11.2005, for Assessment Year 1990-91 and 1991-92 and further by Mumbai Tribunal vide order dated 07.09.2011 in ITA No. 5292 for AY 1997-98. Therefore, it is held that fixed deposits placed with Bombay Mercantile Bank falls within the exemption granted by Section 80P(2)(d) of the Act. The assessee was also eligible under the provisions of Section 80P(2)a(i) as the funds placed by assessee in the form of fixed deposits can be said to be kept for the purpose of business of the assessee as the assessee had availed credit facilities also against such fixed deposits which were again used for the purpose of business of assessee. Moreover, under similar circumstances, Chandigarh Bench in ITA No. 996/2009 as noted by Ld. CIT(A) has decided in favour of assessee. The dividend income is exempt for all persons including assessee. The interest income from bank amounting to Rs. 18,190/- is though not exempt u/s 80(p)(2)(d) but is exempt u/s 80P(2)(i) of the Act. The case law of Totgar’s Cooperative Society was rightly distinguished by Ld. CIT(A). Therefore, keeping in view all facts and circumstances, we do not find any infirmity in the order of Ld. CIT(A).
In view of above, appeal filed by Revenue is dismissed.
Order pronounced in the open court on 19.12.2014.”
After going through the aforesaid order passed by the Hon’ble Delhi High Court in the case of M/s Mantola Cooperative Thrift & Credit Society Ltd. and the ITAT Delhi Benches ‘D’ Bench, New Delhi dated 19.12.2014 the relevant portion of the same reproduced above. I am of the considered view that the facts of the present case and the facts of the case law relied upon by Ld.
Counsel for the assessee are exactly similar not the case law relied upon by the Ld. CIT(A) in the impugned order i.e. M/s Mantola Cooperative Thrift & Credit Society Ltd. Therefore, respectfully following the order of ITAT Delhi Benches ‘D’ Bench, New Delhi in in the case of ACIT, Circle 38(1), New Delhi vs. M/s Jawala Cooperative Urban Thrift & Credit Society Ltd. dated 19.12.2014 the addition in dispute is deleted and appeal filed by the assessee is allowed. No other issues have been argued by the both parties.
In the result, the appeal filed by the assessee is allowed.